Bank of America 2005 Annual Report Download - page 166

BANK OF AMERICA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements—(Continued)
of shareholders in Nations Funds mutual funds, derivative actions brought on behalf of one or more Nations Funds
mutual funds by Nations Funds shareholders, putative ERISA class actions brought on behalf of participants in Bank of
America Corporation’s 401(k) plan, derivative actions brought against the Corporation’s directors on behalf of the
Corporation by shareholders in the Corporation, class actions and derivative actions brought by shareholders in third-
party mutual funds alleging that the Corporation or its subsidiaries facilitated improper trading in those funds, and a
private attorney general action brought under California law. The lawsuits filed to date with respect to pre-merger
FleetBoston subsidiaries include putative class actions purportedly brought on behalf of shareholders in Columbia
mutual funds, derivative actions brought on behalf of one or more Columbia mutual funds or trusts by Columbia mutual
fund shareholders, and an individual shareholder action.
All lawsuits pending in federal courts with respect to alleged late trading or market timing in mutual funds have
been transferred to the U.S. District Court for the District of Maryland for coordinated pre-trial proceedings under the
caption In re Mutual Funds Investment Litigation, other than a putative class action complaint filed on February 22,
2006 in the U.S. District Court for the Southern District of New York alleging, among other things, market timing in the
Nations Funds. Motions to remand to state court remain pending in two of those lawsuits. One lawsuit that originated in
state court was removed to the U.S. District Court for the Southern District of Illinois. Pursuant to an order of the U.S.
Court of Appeals for the Seventh Circuit, the U.S. District Court for the Southern District of Illinois dismissed that
action. On January 6, 2006, the U.S. Supreme Court granted plaintiff’s petition for review on the issue of whether the
Court of Appeals for the Seventh Circuit had appellate jurisdiction to review the remand order.
On August 25, 2005, the U.S. District Court for the District of Maryland dismissed the state law claims and
derivative claims filed by Janus shareholders against the Corporation and certain of its subsidiaries. The claims under
Section 10(b) of the Securities Exchange Act of 1934 were not dismissed. On November 3, 2005, the court dismissed the
state law claims and derivative claims filed against the Corporation and certain of its subsidiaries by shareholders in
various third-party mutual funds. The claims under Section 10(b) of the Securities Exchange Act of 1934 were not
dismissed. Also on November 3, 2005, the court dismissed the claims under the Securities Act of 1933, the claims under
Sections 34(b) and 36(a) of the Investment Company Act of 1940 (ICA) and the state law claims against the Corporation
and certain of its pre-merger FleetBoston subsidiaries. The claims under Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Section 36(b) of the ICA were not dismissed.
On December 15, 2005, the Corporation and its named subsidiaries entered into a settlement of the direct and
derivative claims brought on behalf of the Nations Funds shareholders and the ERISA claims brought on behalf of Bank
of America Corporation’s 401(k) plan participants. Among other conditions, the settlement is contingent upon a
minimum threshold amount being received by the Nations Funds shareholders and/or the Nations Funds mutual funds
from the previously established regulatory settlement fund consisting of $250 million in disgorgement and $125 million
in civil penalties paid by the Corporation in 2005. The settlement is subject to court approval. If the settlement is
approved, the Corporation and its named subsidiaries would pay settlement administration costs and fees to plaintiffs’
counsel as approved by the court.
Parmalat Finanziaria S.p.A.
On December 24, 2003, Parmalat Finanziaria S.p.A. was admitted into insolvency proceedings in Italy, known as
“extraordinary administration.” The Corporation, through certain of its subsidiaries, including BANA, provided financial
services and extended credit to Parmalat and its related entities. On June 21, 2004, Extraordinary Commissioner
Dr. Enrico Bondi filed with the Italian Ministry of Production Activities a plan of reorganization for the restructuring of
the companies of the Parmalat group that are included in the Italian extraordinary administration proceeding.
In July 2004, the Italian Ministry of Production Activities approved the Extraordinary Commissioner’s restructuring
plan, as amended, for the Parmalat group companies that are included in the Italian extraordinary administration
proceeding. This plan was approved by the voting creditors of Parmalat and subsequently, on October 1, 2005, the Court
of Parma, Italy issued its decision approving those claimants who would be recognized as creditors in the proceeding.
Litigation and investigations relating to Parmalat are pending in both Italy and the United States, and the
Corporation is responding to inquiries concerning Parmalat from regulatory and law enforcement authorities in Italy
and the United States.
Proceedings in Italy
On May 26, 2004, the Public Prosecutor’s Office for the Court of Milan, Italy filed criminal charges against Luca
Sala, Luis Moncada, and Antonio Luzi, three former employees, alleging the crime of market manipulation in connection
with a press release issued by Parmalat. The Public Prosecutor’s Office also filed a related charge against the
130